Working in govt projects frustrating, says Infosys

Infosys, a late entrant to India’s domestic market, says its experience in working with the governments in various information technology projects has been ‘frustrating’ and it is giving a ‘hard look’ at such deals to see if it makes sense for the company to be part of those.

“As far as we are concerned, we are having a hard look at many of these government deals to see what makes sense not just from a commercial perspective but also from the point of view of getting satisfaction of completing the project in a successful manner,” said C N Raghupathi, vice-president and head of India business unit at Infosys.

Raghupathi said the company’s (and also many of its other Indian peers’) frustration with the government projects stemmed from several issues.

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One is, when the top decision makers finalised a project by giving genuine thoughts and after careful deliberations, the same vision ‘is not conveyed to the rank and file of the government up to the working level’.

This, he said, posed execution issues due to lack of support from the grass-root level and middle level officials as many of these transformational projects required collection of tonnes of data at the last mile.

“So much so that there is a lot of resistance at the grass-root and middle level because they see as IT interfering with their day-to-day life.

So by the time we go and get the data, it becomes a frustrating experience itself. Raghupathi, however, did not specify any particular project where the company had frustrating experience.

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“Transformational IT project require clients to also be involved,” he added.

The government has been one of the most vital segments for Infosys, which started focusing on the domestic market only in 2008, much after most large Indian peers such as TCS, Wipro, HCL and even global competitions such as IBM and HP.

The Bengaluru-based company is currently engaged with around 20 projects in the government sector, including those of central government departments and state governments.

It is also part of a few large transformational government projects, including the Income Tax Department contract for managing the central processing centre and India Post contract for where it has bagged the vital rural ICT system integration contract.

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Besides, Raghupathi says the way the government structures its technology projects are also flawed.

For example, most of the government technology contracts require the vendors to work as a system integrator which means they have to not only provide the software and services, but have to arrange the hardware elements which almost constitute over half of the total project cost.

“Most companies like us have to pay the suppliers of the hardware upfront whereas we will get our payment only six months after.”

“Today hardware and software are two different specialties by themselves.

“And there is no point in by govt. trying to club both into the same vendor and say you have to do both. . .

So, I think the government should relook at the way it structures these tenders,” he added.

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While Infosys will be quite selective in government deals, going forward the company planning to change its business mix in India by focusing more in the private sector.

Private sector presently accounts for around 15 per cent of its revenues from India.

The company intends to take this to up to 70 per cent in the next couple of years.

“When we launched our India business unit, we started focusing on both the private as well as the government sector.

“However, we had seen more successes in govt. sector.

“Now we want to focus on private sector and trying to change the mix which will also help us to derisk our portfolio in the country,” he added.